The Australian Competition and Consumer Commission issued its final determination relating to changes to the rebidding rules contained in the National Electricity Code today.
The ACCC agreed to authorise the requirement that generators' offers be made in good faith.
"During the summer of 2000-2001, large price spikes in the spot market for electricity were experienced", ACCC Chairman, Professor Allan Fels, said. "Prices rose as high as the price cap, at the time of $5000 per megawatt hour, compared to year average prices of around $40 per megawatt hour. Similar price outcomes occurred again during the winter of 2002.
"The new good faith provision, in conjunction with its existing market monitoring role, will give the National Electricity Code Administrator (NECA) more scope to investigate and prosecute instances of rebidding which are not in the spirit of the National Electricity Code. For its part, the ACCC remains committed to enforcing the Trade Practices Act 1974 and will take action if it receives evidence that a breach of the Act has occurred".
The ACCC's final determination includes a definition of 'good faith'. This follows suggestions made by NECA and code participants during the ACCC's public consultation process. The change will minimise any uncertainty in interpreting the good faith provision.
The ACCC also authorised the power system security code changes proposed by NECA. These will allow the National Electricity Market Management Company (NEMMCO) to meet system security and reliability requirements in a more cost effective way.
The ACCC has declined to authorise either the change which sought to impose a 'reverse onus of proof' on participants of the changes that sought to deal with 'conduct prejudicial to the market'. The proposals would impose additional costs on market participants. The ACCC considers that the benefits of the proposed changes to the code would not outweigh the detriments. Further, the ACCC considers that the proposals are a second best solution to further structural reform.
The ACCC will convene a Market Review Forum to facilitate further debate. The forum will provide industry participants and other interested parties with the opportunity to exchange views on a wide range of market behaviour and related issues. The ACCC proposes to hold the inaugural forum in the first half of next year.